Many families could be at risk of missing out on government cash to ease the growing cost of living due to five loopholes. Millions of households in receipt of certain means-tested benefits will be entitled to a £650 payment, with the first instalment of £326 landing in their accounts between July 14 and the end of July.
Work and Pensions minister David Rutley confirmed that the extra cost-of-living payments for struggling households will not take them over the £16,000 savings limit for universal credit if they choose to set it aside for high winter fuel bills, or be subject to the benefit cap.
Mr Rutley has so far stopped short of telling MPs when the second half of the two-part £650 payment would be made, warning of a risk of fraud. Speaking earlier this week, he said: "As far as the second payment, the reason why we are having to be careful in terms of setting out the definitive details on this is because of fraudulent behaviour.
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"We certainly saw that with the other payments that were made during the pandemic. So we can’t be as explicit about this as perhaps we might have been now we know the levels of fraud that are going on around benefits.
"But I can assure honourable members that the second payment, the regulations around that, will take place after recess." Work and Pensions Secretary Therese Coffey had earlier said the Social Security (Additional Payments) Bill, drafted to authorise the payments, will "boost the budgets of millions of stretched families".
However, there are five loopholes that mean you won't get the first half of £650 cost of living payment in July. You must first claim certain benefits while there are four other circumstances that mean you might miss out on the money next month - even if you do claim the eligible benefits, The Mirror reports.
1) You need to claim certain benefits
The £650 payment is only being awarded to those who claim certain means-tested benefits. These are benefits where your income and savings are taken into account and includes:
Child Tax Credit
Jobseeker’s Allowance (Income-based)
Employment and Support Allowance (Income-related)
Income Support
Pension Credit
Universal Credit
Working Tax Credit
2) Your benefits can't be contribution-based
Anyone on contribution-based benefits, where payouts depend on National Insurance contributions over a set period, won't receive the £650. This means not all claims for Jobseeker’s Allowance and Employment and Support Allowance will be accepted for the payment.
Income-related Employment and Support Allowance is on the list of benefits approved for the £650 by the Government, but not contribution-based Employment and Support Allowance. Similarly, you'll be eligible if you claim Income-based Jobseeker's Allowance but not contribution-based Jobseeker's Allowance.
3) You claim tax credits
If you claim tax credits, you will receive the £650 payment - but the first instalment won't arrive in July. Those who claim Universal Credit, income-related Employment and Support Allowance and Jobseeker's Allowance, Income Support, and Pension Credit will receive £326 in July and a second payment of £324 in the autumn.
Those who claim tax credits will receive their first payment slightly later. The first instalment is not expected to be processed until the autumn, with a second payment to follow in winter - although no exact date has been confirmed yet.
4) Your benefits must have started by a certain date
You must also have been claiming your benefits by a certain date to receive the first instalment of the £650. The qualifying period is April 26, 2022 to May 25, 2022.
For Universal Credit, you must have been entitled to a payment, or later found to be eligible, for an assessment period that ended within these dates. This timeframe is only for the first instalment, and includes tax credit claimants.
The deadline for applying for the second payment has not yet been set - so this means thousands of Brits who start a claim at a later date might end up being eligible for the final instalment. The Government has not said when it will release the criteria for the second payment.
5) You only get one payment per household if you have a joint claim
If you have a joint benefits claim with a partner then you only get one payment of £650 - not two. The news is a blow to households who may have been expecting to get £1,300, not £650.
Essentially, this is the equivalent of one payment per claim.
What help can I get if I'm not eligible for the £650?
There are two other one-off payments being made to vulnerable households. This includes £150 for those who claim certain disability benefits and £300 for pensioners in receipt of Winter Fuel Payments.
Every home in England, Scotland and Wales will also receive £400 off their energy bills, spread out over six months from October. The Household Support Fund has been extended as well by another £500million, to help families who can't claim any cost of living payments.
Some of the help that is offered through the Household Support Fund includes money towards your bills and supermarket vouchers. However, the support does vary between councils - as well as the eligibility criteria.
This means each local authority decides who to give the money to, and how the money should be spent - so you may face a postcode lottery in terms of the help available to you.
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